Discuss the advantages and disadvantages of an attorney-client contingency-fee agreement

Answer 1

Advantages:
a . It provides access to an attorney for persons with little money.
b. It indirectly shifts the responsibility for payment of the fee, if one must be paid (because the plaintiff won), to the wrongdoer.
c. In theory, it should discourage attorneys from filing lawsuits with little merit because they may not be paid.
d. Attorneys can be paid at rates equal to thousands of dollars per hour for their services—a windfall that encourages more persons to enter the profession.
Disadvantages:
a . Because the plaintiff can sue with little financial risk, even if wrong, contingency fee cases may encourage ill-founded vindictive or spite suits.
b. Because the plaintiff does not win every case, the agreed fee, as a percent of damages recovered, must be high enough to also finance those cases that are lost.
c. It may encourage some frivolous suits, and even fraudulent suits (often inspired by media reports of multimillion dollar judgments), especially where the question of liability is marginal, but potential damages are very high (e.g., suits against wealthy defendants; or those—such as medical doctors—with ample insurance coverage; or those who would rather settle unfounded claims or nuisance claims rather than endure unfavorable publicity or spend large sums to gain a likely, yet expensive, victory).
d. As a case progresses, facts learned in discovery often suggest that a claim lacks merit. Little motivation exists for the plaintiff to settle or to drop a marginal case because he or she is not incurring a major expense of litigation (the lawyer's fee).
e. It allows attorneys in some cases to be paid fees equal to thousands of dollars per hour, even though they would normally be willing to perform the same duties for a fixed fee, perhaps $200-$300 per hour.